The TeamLease Employment Outlook Report: July-September 2011

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The quarterly TeamLease Employment Outlook Report provides human resource policy and decision makers a forward looking tool that tracks hiring sentiments in the market. The report carries an insight into what businesses of various sizes – across the country and across industry sectors – have on their talent acquisition anvil for the immediate next three months. The Employment Outlook Survey is carried out, and the analysis done, in the preceding quarter.

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The TeamLease Employment Outlook Report: July-September 2011

  1. 1. inTouch analytics http://be-in-touch.comTeamLeaseEmployment Outlook Report Quarter-19, July-September 2011
  2. 2. Contents1. Preface2. Executive Summary3. Project Objectives4. Index definitions 4.1. Employment Outlook Index 4.2. Employment Trend Index 4.3. Business Outlook Index 4.4. Business Confidence Index5. Employment Outlook 5.1. Net Employment Outlook 5.2. Net Employment Outlook Growth – by sector 5.3. Net Employment Outlook Growth – by city6. Business Outlook 6.1. Net Business Outlook 6.2. Net Business Outlook Growth – by sector 6.3. Net Business Outlook Growth – by city7. Hiring Intent 7.1. Hiring Intent by Location 7.2. Hiring Intent by Hierarchy 7.3. Hiring Intent by Functional Area8. Other Trends 8.1. Employment Outlook Index – city-sector drilldown 8.2. Business Outlook Index – city-sector drilldown 8.3. Attrition trends by sector 8.4. Attrition trends by city9. Insights 9.1. Sentiment Trend Forecasts 9.2. City trend forecasts for Sentiment10. Annexure 10.1. Research Methodology 10.2. Sample Design & Data Collection 10.3. Reasons for Attrition – the employer perspectivehttp://be-in-touch.com
  3. 3. 1. Preface The quarterly TeamLease Employment Outlook Report is a forward looking tool for human resource policy and decision makers, reflecting business sentiment for hiring across cities and sectors. The report carries a snapshot of business hiring sentiment for the immediate next three months with survey and analysis being carried out in the preceding quarter. The Employment Outlook Survey spans eight industry sectors and eight cities across India. The survey covers small, medium and large companies across these sectors, studies attrition and employment trends, and gleans information on hiring sentiments, all this covering different locations, hierarchical levels and functional areas. This edition of the Employment Outlook Report also brings you forecasts for sentiments across cities. We have attempted simple polynomial or logarithmic trending to provide readers with likely index movements over the next two months. While overall index movement trends are likely to be more or less flat and stable, city-specific trends exhibit much sharper movements. With the most critical drivers that influence hiring being tracked quarter on quarter, the Employment Outlook Report is the only one of its kind seeking to deliver high impact hiring decision support to its stakeholders – Business & HR heads, Senior Management as well as industry policy makers.http://be-in-touch.com
  4. 4. 2. Executive Summary • The July-September 2011 quarter is characterized by strong indicators of stability in the Employment market: a flat Employment Outlook Index growth rate (no change) and a marginal drop (single percent point) in growth for the Business Outlook Index. While the overall trends are likely to stabilize further from the incremental changes witnessed last quarter, cities and sectors may not faithfully replicate these trends. • In the midst of a more or less stable market mood, a few sectors display signs of correction. IT and ITeS are brought down –(4 percent points each)– from the dizzying growth rates in Employment sentiment of the past few quarters. This, however, is not significant enough to lower the already high levels these indices have reached. Health & Pharma makes a smart, 5 point recovery from the significant 8 point drop it had experienced during the previous quarter. • But for an incremental, 4 percent point drop in the Business Outlook for Hyderabad and a marginal, 3 percent point increase in the Business Outlook for Ahmedabad, city trends stay loyal to the subdued growth pattern of the previous quarter. This aspect points to geographical uniformity in sentiment trends – trend growth seems to have stabilized at a city-level. • At 20 percent points for Tier-2 cities and 10 percent points for Tier-3 towns, hiring intent for non-metro geographies hits a glass ceiling. Past growth trends for these geographies have been in single digits and slow, indicating that business desire to tap into the labour pools in Tier-2 and Tier-3 cities/towns might not have met with great success. Intent to hire in metros, on the other hand, sees a handsome growth of 2 percent points and rides high at 91 percent. • Junior-level profiles steal the limelight from across all other hierarchical levels with a strong, 3 percent growth to up hiring intent to 67 percent this quarter. This segment shows the highest and the fastest growing intent to hire and beats the 1 percent point growth that Fresh Graduate and Senior level profiles have managed to garner. The Middle-level segment experiences a single percent negative growth. The rather tepid performances by various profiles do not rock the boat, however – hiring intent is quite uniformly distributed across hierarchy. • A simple trendline analysis forecasts that overall Employment and Business Outlook trends are flattening over the next two quarters after many quarters of mostly upward growth. Observations accompanying the analysis also highlight index movement directions that are indicative of an impending sentiment slowdown. City specific trends vary, however, and a few surprises are likely in store.http://be-in-touch.com
  5. 5. 3. Project Objectives The Employment Outlook Report aims at – • Providing forward looking estimates of hiring sentiment and thus enabling its users with a tool to make effective hiring / people decisions for the immediate next quarter. • Providing *Hiring Sentiment Intelligence* for different industry sectors, business sizes and geographies, as well as across hierarchical levels and functional areas. 4. Index Definitions • Employment Outlook Index: The Employment Outlook Index is computed as the difference in the proportion of respondents who report an increase in hiring needs and those who report a decline in hiring needs over the next three months. • Business Outlook Index: The Business Outlook Index is computed by subtracting the percentage respondents who say business in the next three months is likely to decrease from the percentage who say it will increase.http://be-in-touch.com
  6. 6. 5. Employment Outlook 5.1. Net Employment Outlook 5.2. Net Employment Outlook Growth – by sector 5.3. Net Employment Outlook Growth – by cityhttp://be-in-touch.com
  7. 7. 5.1 Net Employment OutlookThe Net Employment Index stays put at its previously achieved highpoint for the July-September 2011 quarter. The Net Employment Outlook Index is the difference in theproportion of respondents reporting an increase in hiring needs and those reporting a declinefor the quarter in question.Quarter Period (Figures in percentage) Increase Decrease No Change Net Employment Outlook 19 Jul—Sep 2011 76 2 22 +74 18 Apr—Jun 2011 78 4 18 +74 17 Jan—Mar 2011 74 5 21 +69 16 Oct—Dec 2010 72 4 24 +68There has been an appreciable, 4 point increase representing the number of businesses thatreport no changes in their hiring requirements for the quarter, accompanied by a tinyproportion of businesses that report a reduction in hiring requirements. The net effect is that ofstability in what has so far been a long term positive employment sentiment trend.[Shaded cells have significant increases (gray) /decreases (red) in Index.]http://be-in-touch.com
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  9. 9. 5.2 Net Employment Outlook Growth – by sectorSector-level index movements show up an apparently dissimilar pattern compared with overalltrends. However, a closer look reveals consolidation in IT and ITeS – traditionally fast growingsectors that report negative growth for the upcoming quarter. While these two sectors seehiring sentiments dropping appreciably, Healthcare & Pharma sees a significant increase. Sectors (Figures in percentage) Quarter Net Increase / Decrease 19 18 17 16IT 87 91 70 69 -4ITES 90 94 64 63 -4Financial Services 53 56 62 65 -3[FS]Retail & FMCG [R&F] 72 70 68 60 2Infrastructure [INF] 66 63 60 68 3Manufacturing & 55 53 82 74 2Engineering [M&E]Telecom [TEL] 87 86 64 61 1Healthcare & 70 65 73 74 5Pharma [H&P]The drops in sentiment, in case of IT and ITeS, follow a heady previous quarter. Althoughsignificant, the two sectors are still keeping themselves in relatively high spirits compared withthe scenario during quarters 16 and 17.http://be-in-touch.com
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  11. 11. 5.3 Net Employment Outlook Growth – by cityInsignificant changes in sentiment mark city trends for Employment Outlook, except forKolkata, which slips to a new low – relative to other cities. Sectors (Figures in percentage) Quarter Net Increase / Decrease 19 18 17 16Mumbai [Mum] 72 74 69 70 -2Delhi [Del] 70 69 67 67 1Bangalore [Blr] 88 86 83 80 2Kolkata [Kol] 56 60 63 58 -4Chennai [Chn] 70 72 67 66 -2Pune [Pun] 78 76 79 77 2Hyderabad [Hyd] 60 61 58 64 -1Ahmedabad [Ahd] 72 70 73 73 2The stability factor, forecast in previous editions of the report, continues to keep city trendsbuoyant.http://be-in-touch.com
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  13. 13. 7. Business Outlook 6.1. Net Business Outlook 6.2. Net Business Outlook Growth – by sector 6.3. Net Business Outlook Growth – by cityhttp://be-in-touch.com
  14. 14. 6.1 Net Business OutlookA significantly large number of businesses expecting the business environment to stayunchanged works to keep the Business Outlook incrementally lesser than the new high theindex had reached last quarter – but still very high.Quarter Period (Figures in percentage) Increase Decrease No Change Net Business Outlook 19 Jul—Sep 2011 77 2 21 +75 18 Apr—Jun 2011 80 4 16 +76 17 Jan—Mar 2011 78 5 17 +73 16 Oct—Dec 2010 75 4 21 +71While the number of respondents indicating an increase in business sentiment has dropped, there hasbeen a proportionate reduction in the numbers indicating a dip in business sentiment.http://be-in-touch.com
  15. 15. 6.2 Net Business Outlook Growth – by sectorSector trends for Business Outlook fluctuate less than their Employment sentimentcounterpart. IT is the lone sector with a significant dip in business sentiment. Still, the resultantnumber for IT is way higher than the sentiment across all other sectors. Sectors (Figures in percentage) Quarter Net Increase / Decrease 19 18 17 16IT 90 94 77 67 -4ITES 79 80 59 56 -1Financial Services 52 49 55 58 3[FS]Retail & FMCG [R&F] 85 88 69 63 -3Infrastructure [INF] 61 60 67 70 1Manufacturing & 64 63 82 72 1Engineering [M&E]Telecom [TEL] 57 55 47 51 2Healthcare & 63 65 76 81 -2Pharma [H&P]Financial Services, Manufacturing & Engineering and Infrastructure – in that order (reducingorder of concern) – remain concern areas. The business sentiments in these sectors seem to belanguishing well below others for a considerable period of time. Healthcare & Pharma has failedto perk itself up from the previous quarter’s big (11 point) drop.http://be-in-touch.com
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  17. 17. 6.3 Net Business Outlook Growth – by cityStable city trends for Business Outlook see an insignificant blip in case of Hyderabad and analmost equally small uptick for Ahmedabad. Sectors (Figures in percentage) Quarter Net Increase/Decrease 19 18 17 16Mumbai [Mum] 65 63 59 54 2Delhi [Del] 51 52 51 52 -1Bangalore [Blr] 80 81 79 79 -1Kolkata [Kol] 69 70 75 77 -1Chennai [Chn] 82 81 77 70 1Pune [Pun] 84 85 85 83 -1Hyderabad [Hyd] 76 80 79 80 -4Ahmedabad [Ahd] 74 71 76 77 3http://be-in-touch.com
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  19. 19. 9. Hiring Intent 7.1. Hiring Intent by Location 7.2. Hiring Intent by Hierarchy 7.3. Hiring Intent by Functional Areahttp://be-in-touch.com
  20. 20. 7.1 Hiring Intent by GeographyTier-II cities suffer a second successive incremental drop in hiring intent this quarter while themetros continue their rather flat upward trend. Tier-III towns and rural areas remain at the lownumbers of the previous quarter. City (Figures in percentage) Quarter Net Increase/ Decrease 19 18 17 16Metro 91 89 89 88 +02Tier – II Cities 20 21 22 20 -01Tier – III Towns 10 10 9 9 NCRural 1 1 1 2 NChttp://be-in-touch.com
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  22. 22. 7.2 Hiring Intent by HierarchyA marginal increase in hiring intent across all hierarchical levels is beaten by a significantupward trend in hiring, specifically, at junior levels. Mid-level hiring intent stays stable althougha single point drop in intent is observed. Level (Figures in percentage) Quarter Net Increase/ Decrease 19 18 17 16Entry Level 50 49 47 41 +01[No Experience]Junior Level 67 64 66 63 +03[1 – 3 years Experience]Middle Level 44 45 43 41 -01[3 – 7 years Experience]Senior Level 25 24 23 21 +01[> 7 years Experience]Not Hiring 10 10 12 16 NChttp://be-in-touch.com
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  24. 24. 7.3 Hiring Intent by Functional AreaFunctional area trends for hiring intent are stable – especially with Sales / Marketing /Customer Service, IT, Engineering and Blue Collar. Support functions seem to be bearing a smallbrunt of negative intent this quarter, following many quarters of stability. F (Figures in percentage) Quarter Net Increase / Decrease 19 18 17 16Sales / Marketing / 82 78 77 77 +04Customer Service [SMC]IT 31 29 27 27 +02Engineering [ENG] 43 42 41 41 +01Accounts / Finance 15 16 16 16 -01[A&F]Administration / HR / 12 14 13 13 -02Office Service [AHO]Blue Collar [BC]* 43 40 37 37 +03Other 10 13 15 15 -03Not hiring 4 5 7 7 -01*Previously included under ‘Others’http://be-in-touch.com
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  26. 26. 11. Other Trends 8.1. Employment Outlook Index – city-sector drilldown 8.2. Business Outlook Index – city-sector drilldown 8.3. Attrition trends by sector 8.4. Attrition trends by cityhttp://be-in-touch.com
  27. 27. 8.1 Employment Outlook Index – city-sector drilldown City Quarter Total Sector IT ITeS FS RMF INF M&E TEL H&PMum 19 72 12 10 9 9 10 8 7 10 18 74 13 11 8 8 12 7 9 11 17 69 12 9 8 9 14 5 6 10 Del 19 70 10 6 9 11 10 10 10 9 18 69 10 5 11 13 8 9 11 8 17 67 11 4 10 13 6 8 9 10 Blr 19 88 13 10 7 9 14 13 19 12 18 86 16 10 4 7 15 14 17 11 17 83 14 8 3 6 17 13 15 14 Kol 19 56 3 3 10 11 5 4 5 17 18 60 5 3 12 12 5 5 5 18 17 63 5 1 16 13 4 6 3 21 Chn 19 70 10 11 9 10 9 10 13 4 18 72 12 11 10 8 10 12 11 6 17 67 10 9 12 7 10 9 10 7http://be-in-touch.com
  28. 28. Pun 19 78 16 15 6 5 18 14 8 8 18 76 15 15 5 6 17 16 6 7 17 79 17 16 4 5 20 17 4 6 Hyd 19 60 9 11 5 8 10 11 4 4 18 61 10 12 4 8 9 10 5 6 17 58 9 9 3 9 8 13 3 7 Ahd 19 72 6 4 21 6 4 12 8 23 18 70 4 3 20 6 5 13 8 22 17 73 6 2 22 7 4 15 7 228.2 Business Outlook Index – city-sector drilldown City Quarter Total Sector IT ITeS FS RMF INF M&E TEL H&PMum 19 65 12 12 7 6 17 9 5 10 18 63 14 10 8 5 16 10 6 8 17 59 15 9 7 5 17 8 4 6 Del 19 51 10 3 5 13 10 6 7 10 18 52 10 4 4 14 8 8 9 9 17 51 12 4 5 15 6 6 8 10http://be-in-touch.com
  29. 29. Blr 19 80 17 11 9 7 12 9 12 8 18 81 19 10 8 5 14 10 13 9 17 79 16 8 7 5 16 10 12 11 Kol 19 69 10 4 14 10 4 10 7 20 18 70 11 4 15 9 4 13 6 19 17 75 10 4 18 8 6 16 5 22 Chn 19 82 15 16 12 4 9 15 11 11 18 81 11 19 10 5 10 15 10 12 17 77 8 18 10 5 9 14 10 14 Pun 19 84 12 24 6 5 18 17 8 7 18 85 14 22 4 4 20 17 10 9 17 85 16 23 3 4 22 16 7 8 Hyd 19 76 10 9 11 7 9 10 8 15 18 80 13 10 12 6 10 9 6 18 17 79 14 9 13 6 9 11 3 20 Ahd 19 74 8 6 18 8 2 17 3 19 18 71 5 6 18 6 3 19 4 18 17 76 6 5 22 6 2 21 2 21http://be-in-touch.com
  30. 30. 8.3 Attrition Trends – by cityAttrition rates marginally increase for most cities this quarter and so do annual attrition rates.Bangalore and Hyderabad top the charts by far – compared with the rest of the cities.8.4 Attrition Trends – by sectorSectors continue their rather flat trends of attrition. The current quarter does not addappreciably to the modest attrition rates of before.http://be-in-touch.com
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  32. 32. 13. Insights 9.1. Sentiment Trend Forecasts 9.2. City trend forecasts for sentimenthttp://be-in-touch.com
  33. 33. 9.1 Sentiment Trend ForecastsThe upward trending of Employment and Business Outlook indices over the past severalquarters and a sobering / stabilizing effect over the previous and current quarter give rise to afundamental ask: is it about time for sentiments to fall? The below analysis investigates thehypothesis with a simple, trendline forecast of Employment and Business sentiment.The trendline forecast for the next two quarters shows a downward direction Business Outlookis likely to take. The Employment Outlook, meanwhile, is likely to trend upward for the periodin consideration.What is apparent about the Business Outlook is an alternating pace of positive growth over thepast 6 quarters. This alternating rate of growth in sentiment has resulted in a graduallydeclining trend and sees a small, single point dip for the quarter in study currently. The currentdip, on its own, may not hold much evidence of an impending fall in sentiment. The gradualflattening of the trend does, however, point to a likely downward movement.It could also be observed that the Employment Outlook trendline is flattening over the pastmany quarters. However, the appreciable sentiment uptick over the last quarter and the lesshttp://be-in-touch.com
  34. 34. flat nature of this index’s movement – relative to the Business Outlook Index – might meanthere is still time to go before the Employment Index starts to fall.This may not mean that individual cities and sectors will likely have downward movement ofIndices. The below section brings out differences in the index movements for cities. The sectordata was found to have lesser degree of accuracy with the approach followed and therefore,we have not included a sectoral analysis here.9.2 City trend forecasts for sentiment Mumbai has a more or less upward trend for both the indices – with Employment Outlook slightly outpacing Business. [A caveat here is that the trend-fit for Employment Outlook is not as good as it is for Business Outlook]http://be-in-touch.com
  35. 35. Delhi seems to have a pattern similar to that of Mumbai with an even more marked departurebetween the directions of the two trendlines. [Again, the curve-fit for Employment Outlook ispoorer than for Business]http://be-in-touch.com
  36. 36. Bangalore seems to show no respite from its dizzy growth trend on both the indices. The upwardmovements are clear and more plausible than in case of Mumbai and Delhi.http://be-in-touch.com
  37. 37. Despite rather tepid growth rates for both indices over the past five quarters, Kolkata is quite likely tohave a fairly quick bucking of this negative trend over the next couple of quarters. It also reasons thatthe city’s Employment and Business indices have succeeded in breaking into the 60’s and 70’s lines overthe 13th and the 14th quarters but failed to stay up thereafter. The forecasts show a possibility for thecity’s indices to uptrend in the immediate next two quarters.http://be-in-touch.com
  38. 38. Slow and steady seems Chennai’s and Pune’s style but seemingly no longer! The pace of growth hasquickened over the past quarters and this is likely to translate into rapid growth in Employment andBusiness Outlook over the next two quarters.http://be-in-touch.com
  39. 39. Hyderabad’s index data does not lend itself very well for a simple trendline analysis. However, it couldbe observed from the above that index movements have flattened – and this is a concern.http://be-in-touch.com
  40. 40. Ahmedabad has index movements almost mirroring each other so far. However, this is not likely to holdover the next few quarters. The chart points to a likely divergence in movements of the Employmentand Business Outlook – with a downward movement in Business Outlook.http://be-in-touch.com
  41. 41. 9. Annexure Research Methodology The Employment Outlook Survey follows a rigorous and statistically validated process as detailed below. Sample Design & Data Collection Random sampling technique was used to identify respondents for the survey. Data sources used to collect contact data were: 1. Kompass directory for small, medium and large sized companies in the private sector. To ensure continuity with the baseline measurement, the core random sample was drawn from this database. 2. NASSCOM database for IT companies 3. Companies registered with bpo.india.org in the case of ITES and 4. Financial companies registered with the Bombay Stock Exchange (BSE). Respondent Selection Target respondents for the study were Business & HR Heads as well as Senior Managers with hiring mandates. The databases offered a contact name for each company listed. Interviewers called into each of these companies and obtained the names of the appropriate individuals who were responsible for hiring decisions. Data Collection The survey instrument was then administered to the target respondents using the CATI (Computer Aided Telephonic Interview) methodology. Appropriate computer software was used for data collection and tabulation. Please refer the following section named ‘Sample Distribution’ for details on city and business size-wise breakup of the sample.http://be-in-touch.com
  42. 42. Sample DistributionCity-wise breakupSectors / City Mumbai Delhi Bangalore Kolkata Chennai Pune Hyderabad Ahmedabad TotalManufacturing &Engineering [M&E] 8 8 10 8 11 9 10 10 74Retail & FMCG[R&F] 19 16 11 9 9 11 8 10 93Financial Services[FS] 8 8 10 8 10 10 9 11 74IT 11 9 11 10 10 9 9 11 80ITeS 8 10 10 9 9 9 11 10 76Infrastructure [INF] 8 11 9 9 8 11 10 9 75Telecom [TEL] 10 10 13 12 10 13 8 8 84Healthcare & Pharma[H&P] 11 9 10 10 11 9 9 10 79Total 83 81 84 75 78 81 74 79 635Business Size Breakup Small Medium Large [Up to 249 employees] [250 – 999 employees] [1,000 or more employees]Mumbai 21 51 11Delhi 13 57 11Bangalore 17 53 14Kolkata 14 54 7Chennai 22 41 15Pune 15 52 14Hyderabad 18 43 13Ahmedabad 16 47 16http://be-in-touch.com
  43. 43. 10.3. Reasons for Attrition – the employer perspectiveBy CityBy Sectorhttp://be-in-touch.com
  44. 44. Know more, Follow us and Like us:http://twitter.com/be_in_touchhttp://facebook.com/intouchanalyticshttp://linkedin.com/companies/305009http://be-in-touch.com

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